Correlation Between GALENA MINING and Telefonaktiebolaget

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Can any of the company-specific risk be diversified away by investing in both GALENA MINING and Telefonaktiebolaget at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GALENA MINING and Telefonaktiebolaget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GALENA MINING LTD and Telefonaktiebolaget LM Ericsson, you can compare the effects of market volatilities on GALENA MINING and Telefonaktiebolaget and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GALENA MINING with a short position of Telefonaktiebolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and Telefonaktiebolaget.

Diversification Opportunities for GALENA MINING and Telefonaktiebolaget

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between GALENA and Telefonaktiebolaget is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GALENA MINING LTD and Telefonaktiebolaget LM Ericsso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonaktiebolaget and GALENA MINING is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GALENA MINING LTD are associated (or correlated) with Telefonaktiebolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonaktiebolaget has no effect on the direction of GALENA MINING i.e., GALENA MINING and Telefonaktiebolaget go up and down completely randomly.

Pair Corralation between GALENA MINING and Telefonaktiebolaget

Assuming the 90 days horizon GALENA MINING is expected to generate 19.88 times less return on investment than Telefonaktiebolaget. In addition to that, GALENA MINING is 1.94 times more volatile than Telefonaktiebolaget LM Ericsson. It trades about 0.0 of its total potential returns per unit of risk. Telefonaktiebolaget LM Ericsson is currently generating about 0.12 per unit of volatility. If you would invest  200.00  in Telefonaktiebolaget LM Ericsson on August 31, 2024 and sell it today you would earn a total of  578.00  from holding Telefonaktiebolaget LM Ericsson or generate 289.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

GALENA MINING LTD  vs.  Telefonaktiebolaget LM Ericsso

 Performance 
       Timeline  
GALENA MINING LTD 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GALENA MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GALENA MINING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
Telefonaktiebolaget 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Telefonaktiebolaget LM Ericsson are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Telefonaktiebolaget reported solid returns over the last few months and may actually be approaching a breakup point.

GALENA MINING and Telefonaktiebolaget Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GALENA MINING and Telefonaktiebolaget

The main advantage of trading using opposite GALENA MINING and Telefonaktiebolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GALENA MINING position performs unexpectedly, Telefonaktiebolaget can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Telefonaktiebolaget will offset losses from the drop in Telefonaktiebolaget's long position.
The idea behind GALENA MINING LTD and Telefonaktiebolaget LM Ericsson pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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